Condotel segment forecast to keep booming in 2018

The condotel (condo hotel) market is forecast to remain
attractive to investors in 2018, with increasing amounts of capital poured by
both domestic and foreign investors into the segment.

Nguyen
Tran Nam, Chairman of the Vietnam Real Estate Association (VREA), said the
occupancy rate of hotels in Hanoi and Ho Chi Minh City as well as luxury
resorts exceeded 90 percent, describing room booking during holidays as a hard
task.

“Hundreds
of thousands of rooms need to be built to meet tourists’ demand,” he said.

Condotels
and villa resorts have formed a new trend of investment in Vietnam in recent
years, Nam said, citing more than 12,500 out of more than 22,800 available condotel
apartments traded successfully in 2017 in major destinations like Da Nang,
Khanh Hoa, Phu Quoc and Binh Thuan in the central region and the northern
province of Quang Ninh.

Big
domestic investors such as Vingroup, Sun Group and CEO Group have also invested
in condotel projects.

According
to VREA, Khanh Hoa province has the most condotels with upwards of 11,800
apartments, followed by Da Nang city with more than 7,000. Quang Ninh, a newcomer,
put up to 1,300 condotel apartments on sale last year.

Stephen
Wyatt, General Director of Joneslanglasalle Vietnam, a real
estate services firm specialising in commercial property and investment
management, explained that investors want to utilise the development of
Vietnam’s tourism.

In
2017, Vietnam welcomed nearly 13 million international tourists, an increase of
30 percent against the previous year. Thanks to the number, Vietnam has been
named in the list of the world’s top ten fastest growing travel destinations.

The
demand for villa resorts and condotels will not cool down in the near future as
Vietnam aims turn tourism into an economic spearhead.

The
country is expected serve 15 million foreign arrivals in 2018 and up to 20
million in 2020. By 2020, the number
of domestic holiday-makers is projected at 82 million and the sector’s
contribution to national GDP at more than 10 percent.

However,
Nam said, the condotel sector still faces challenges in terms of legality,
adding that condotels have yet to be regulated, which has caused difficulties for
State management agencies, and affected the interests of people and businesses.

Only
the Tourism Law 2017 identifies condotel and villa resort as tourism
accommodation establishments, he said.